Throw Away Your Punch Cards to Build Customer Loyalty

  • April 10th, 2013
  • Ty Kiisel

Throw Away Your Punch Cards to Build Customer LoyaltyNo doubt about it, small businesses want to build loyal customers.

There’s a restaurant I go to at least once every week. My wife and I have become “regulars”—”loyal” customers. They have a punch card, that I often forget to get punched after dinner. Nevertheless, our waitress knows me, she even knows my order, and before we’ve even sat down, she’s got it started. The food is good, the service is great, the price is right, and it’s comfortable—the punch card is superfluous.

Yeah, I like the free meal in every ten, but because my waitress knows I always forget the card, she reminds me now when I pay the check. Although I carry the card, she’s keeping track of it for me. Why not just get rid of the card?

A few years back, following a haircut, the stylist said to me, “Thanks for being a good customer, this haircut is on me.”

Wow, they recognized me. They really do appreciate my business.

About 10 haircuts later, another stylist in the same place said something like, “Ty, since this is haircut number 11, it’s free this time.”

I was disappointed. Not because they were keeping track (I think every small business should do that), but she pulled back the curtain and dispelled the magic. They really didn’t know me, they were just keeping track of me. I get my hair cut someplace else now.

I think it’s better to “surprise and delight.” In other words, “Thanks for being a loyal customer, let me get it this time,” is much more powerful than, “You’ve earned a free meal by eating at our restaurant 10 times.” I know it’s tough for some businesses to do this because of the nature of their business, but even if you don’t track individual customer purchases, you could still surprise and delight your customers. Imagine standing in line to pay for your hamburger and the person behind the counter saying something like, “Thanks for being such a great customer, this one is free.”

You don’t know they’ve been counting and your the 100th customer that day. You’re just excited that you got the free meal and didn’t have to “earn” it. If you weren’t a loyal customer, you just became one to see if it happens again—and so did everyone else that was there at the time. You were surprised and delighted.

Punch cards make your customers do all the work of keeping track of their loyalty, it’s really you that should be paying attention. What’s more, I have several punch cards in my desk drawer that seldom see the light of day, because it’s not the punch card that makes me like you—it’s your service, your products, and whether or not I feel like I’m being treated fairly—the rest is just a bonus.

A couple of weeks ago, after a ride through central Utah, a friend of mine and I stopped at one of the local Harley dealerships. He had recently bought a new motorcycle and over the last year had purchased a number of other things from the dealer. He had $30 or $40 worth of reward points he hadn’t spent yet, and they were about to expire. About to expire? Since when did loyalty expire?

I had just redeemed some of the same type of loyalty points at another dealer and they had been accumulating for a couple of years. I actually had enough to buy a very nice leather jacket. What’s more, the young lady that helped me seemed excited that I was able to do it. I have to admit, I liked the loyalty program then. However, I had forgotten about it over the years and didn’t even know I had so many points until I got an email from the dealer announcing that they were doing away with the loyalty card and would now keep track of all my purchases on computer.

Because I still have to “earn” my reward points by making purchases, it doesn’t pack the same loyalty punch as a surprise and delight. I wonder what my reaction would be to something out of the blue like, “Thanks for being such a good customer, this time your motorcycle service is on the house.”

About the Author

  • Ty Kiisel

Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty makes small business financing and trends accessible in common sense language devoid of the jargon.

Comments

  1. I think that this article is one of the single best things a business can do to create raving fans. EVERYONE likes to be appreciated, complimented and admired especially if they pay you for a good or service. There is no better way than to HONOR them with something unexpected.

    Bravo….. It will be a business practice that my team employs!

  2. I don’t disagree with the “surprise and delight” concept for customer service. However I’d like to add a couple thoughts.

    I think one needs to be a little bit careful when rewarding a customer in front of other customers when it looks like a “just because you’re you” situation. It’s possible to disappoint or even anger other customers when you give away freebies and they’re not included. It may strike them as favoritism and they’ll quit coming.

    My other thought was, I was given a card not long ago by a business that allowed me to take 10% off my entire purchase. I didn’t have to use it right then but I could hold onto it and use it another time. This allowed me to get a greater discount at a later time when I was buying more items versus the relatively small purchase I made at the time I got the card. I was ‘delighted’ to use the card at a time of my choosing. Don’t underestimate the power of allowing the customer to have it their way.